The cost The cost of driving from A to B is clearly a massive factor in people’s decision-making process. With the huge increase in the cost of electricity over the last couple of years, the distinction between filling up with traditional fuel and recharging an electric vehicle is not as stark as it once was, but it is relatively easy to work out the numbers. But what about the hidden costs? For many years now, domestic electricity has carried VAT at 5% whilst commercial supplies are charged at 20%. Even without profit margins, that makes it much more expensive to recharge your EV from public charging point than from at home. For businesses with fleets of larger vehicles which can’t be charged from domestic power points, this becomes a significant cost concern. Then there is depreciation. According to Autovista, the average retained value for a used electric car after 3 years and 36,000 miles is 47.6% of its cost. That compares very unfavourably to petrol engine cars at 67.1%
and even the out-of-favour diesels not far behind. For a car costing £40,000 new that is an additional cost of £7,800 or 20% over a 3 year period. Is electric really the only way forward? BMW doesn’t think so – they have just launched the iX5 Hydrogen which they say acts as an ‘additional option’ for locally emission-free mobility in the future. BMW have worked with Toyota, a notable absentee from the fully electric market until recently, to source the hydrogen cells. Perhaps this represents an alternative for the future, although if the electricity infrastructure in this country is a problem, you will need a fair amount of good fortune finding a hydrogen cell filling station– there are currently 15. Hydrogen however is widely seen as a vital component to the commercial vehicle market’s future transition to net zero although hydrogen cell-powered HGVs and heavy plant is really not feasible at the moment.
Perhaps it is no surprise then that the UK government signed an £11.3M deal with Toyota late in 2022 to assist with the development of hydrogen-powered pickup trucks with a range of big players investing huge sums in the development of this technology. Hydrogen-powered trucks also have a greater fuel-efficiency and range than battery-electric vehicles, making them beneficial for long- haul transportation. Unsurprisingly, the cost of hydrogen trucks is still prohibitively high for most transport and haulage firms, but as economies of scale and technologies for solid- state fuel cells and storage systems advance, the costs are expected to decrease. Scrutton Bland have a comprehensive range of business advisory services for transport and logistics firms. Whether you need advice on VAT regulations, moving your accounting processes to digital, or improving your financial management, we can help. Get in touch with James or one of the Business Advisory team at hello@scruttonbland.co.uk or phone 0330 058 6559.
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